CHECK IT OUT

Robert HeadyCHICAGO TRIBUNE

Too many consumers zip through the account-opening process at a bank without asking the right questions. And too many stick with the same old institution for years without checking whether any of their costs have changed.

That's like inviting yourself to get mugged, particularly at a time when accounts are becoming more complicated, not simpler, as fees keep going up.

You should nail down all the fees in advance. As a guide, stuff this laundry list of key questions in your pocket and try them out on your friendly banker during your next visit. You'll be mighty surprised at some of the answers:

- Credit cards. If the card has an "introductory rate," what happens after the introductory period expires? Chances are the rate will zoom above 16 percent.

Does the bank have the right to charge a different rate for any reason? Such as for a late payment, or a change in your credit report?

What's the grace period on the card--the period to pay off your balance without incurring interest charges on purchases? Lately, some banks have reduced the grace.

Is there a regular annual fee? A special fee if you don't use your card for several months, or if you transfer a balance to or from another institution?

If the card has a rebate program, do you get the rebates on all purchases? Some rebates are based only on the balance you carry forward.

- Checking. Are canceled checks returned with your statement, or must you pay extra to get them back?

Is there a charge for an ATM card with your checking account? What's the charge for making a transaction on another bank's machine?

What are the extraneous charges for a bounced check or a stop payment order?

Is there a charge to check your balance via telephone, ATM or a live teller?

Can you write checks on the account (if you can, it's a money market account, not a passbook)? How much do you get zapped for writing more than three third-party checks per month on an MMA?

Does the account offer ATM access?

Is there a limit to the number of free transactions? If so, what's the charge if you exceed that magic number?

Is there a fee for closing the account?

- Certificates of deposit (CDs). What is the annual percentage yield (APY)? That's what you earn the first full year after your interest has been compounded.

Is the APY fixed, and does it apply to the full amount you're depositing?

What are the early withdrawal penalties?

What happens to your money when the CD matures? Some banks put it in a savings account earning zero interest, unless you've instructed them otherwise.

Are your accounts FDIC-insured to $100,000 per person? Note: Some deposit brokers have been advertising rates that walk, talk and quack like a CD, but aren't.

Can the CD be "called"? In other words, will you have to surrender the CD at any time the bank demands it?

- Mortgages. What are all the fees, and what are they for? How many of them are absolutely required? Under what conditions will the lender waive them? Study a hard copy of all the fees before doing business.

Must you maintain an escrow account for insurance and taxes? Is there a fee if you don't?

For an adjustable rate mortgage, what is the highest the rate could ever go?

Can the loan have negative amortization, where you could wind up paying more in interest than the original amount of the loan?

- Home equity line of credit. What are all the closing costs?

Is there a prepayment penalty or annual fee?

What is the lifetime rate cap--the maximum possible rate you could be charged during the life of the loan?

What is the minimum transaction amount when you draw money from your credit line?

If you only pay the minimum interest due each month, how long do you have to pay off the full balance?

Will you be slapped with an "inactivity fee" if you don't use any of the money in your credit line for one year?

- Latest rate trend. Virtually no movement in the week on any type of bank account--savings, mortgages or loans.

- Credit card tip. Want to dispute a credit card charge? Best to complain in writing to the proper address, often on the back of your statement, before you pay it off.

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Robert Heady publishes Bank Rate Monitor, a newsletter based in North Palm Beach, Fla.